Most marketing departments spend 80 percent of their budgets to acquire new customers and only 20 percent to retain current ones. As the acquisition-focused landscape becomes increasingly crowded with newsjacking headlines and keyword stuffing, it’s important to recognize and value what’s actually driving your organization: your customers.
A brand that allocates more toward understanding, communicating with and learning from customers will see the benefits tenfold.
Redirecting your resources to customer retention can mean anything from simple customer swag packages to dedicated support-team development to a full-fledged customer-advocacy program. Regardless of the tactic, every customer-retention program has the same goal: Develop loyal customers who will, in turn, advocate for your brand.
Customers who are advocating have a big impact. In fact, 74 percent of consumers identify word-of-mouth marketing as a key influencer in their purchasing decisions, and word of mouth improves marketing effectiveness by 54 percent.
Brands that ignore the importance of the relationship with happy, passionate customers are missing a lucrative and reliable opportunity. On social media, 58 percent of consumers ask family, friends and colleagues for their opinions about brands.
Facebook’s recent announcement that it will favor personal posts over those from brand pages in its News Feed is a strong indicator that the future success of any organization is through word-of-mouth marketing—happy customers willing to advocate for your product.
Referrals that arrive at your site through word-of-mouth marketing are extremely valuable. In fact, a direct referral lead is four times more valuable than a web lead. Not only is a referred customer more likely to purchase, but they spend more and stay a customer longer, too.
In order to see consistent advocacy, you need to have a process in place. Sure, customers might serendipitously recommend your product a few times if and when the circumstances are perfect, but they won’t tell others about your product consistently unless you ask. For that, a thoughtful and strategic customer advocacy program is key.
We’ve seen the power of referrals firsthand through our Sprout Social All Stars, social media influencers and Sprout experts who we’ve organically worked with for years and have formalized our relationships with over the past six months.
Since launch, the group has generated more than 1,400 shares of Sprout-related content across their social networks. And we’d be remiss if we didn’t acknowledge the likely dark social traffic from their efforts, as well as brand awareness, that have added to Sprout’s bottom line.
So, where does a successful customer-advocacy program begin? First, look to your customer base and identify the super vocal, the long-term customers and the ones spending the most. The individuals in these three key groups are worth getting to know well.
The super vocal
When you think about finding your most passionate customers who are vocal, you’ll tend to seek out those using words like “best,” “love” or “recommend” along with your product or company name. These people self-identify, and you should already be focusing on these relationships and working to make them stronger.
Often overlooked are those always reaching out when they have issues. The people who can’t keep quiet because they rely on your product daily should be valued almost above all else—yes, even more than how much they spend with your company. If they’re logging in everyday, purchasing your product religiously or budgeting your service in their monthly necessities, they obviously want your organization to be the best it can be. They’re your biggest cheerleaders, really.
It’s important to ensure that you can differentiate those trolling your brand or exploiting your grace for freebies from those that are truly concerned. If they regularly ask for compensation or a refund of sorts, and if it’s your brand’s practice to grant it, keep a record of this. Continue to offer reliable customer support, but don’t look to them to do you any favors.
Typically those who aren’t just looking for refunds will be incredibly grateful for good customer service. There’s a good chance they’ll turn and advocate after someone has heard them out and remedied their bad experience.
The long-term customers
At Sprout, we grandfather people who are subscribed to plans that we retire. This includes honoring prices that are just one-sixth of the minimum plan values currently available, meaning that our customer subscription values can vary widely.
While those on higher-level plans do receive additional functionality within the platform and a few other perks, every other interaction with our customers, no matter what the subscription type, is the same. They have access to our incredible customer support. They are potential All Stars, case studies or content partners.
Customers who have been purchasing anything from your organization for an extended time are truly invested. They have consciously made a decision to give you their hard-earned money time and time again.
In addition to placing a high value on these people, be sure to communicate with them, too. They may have more insight around your organization than you do. Tap their extensive experience with your brand and pull insights to better your company.
The ones spending the most
Out of Coca-Cola’s entire customer base, just 12 percent of consumers of the flagship beverage are responsible for 80 percent of its sales, while only 6 percent of consumers are responsible for 80 percent of sales of Diet Coke and a minuscule 3 percent account for 80 percent of sales of Coke Zero.
This kind of disproportionate spending is similar for many organizations. Yet these brands speak to all of their customers the same way, acknowledge their purchases the same way and market the same way.
Look into your customer database and find those big accounts. With business-to-business companies, the big spenders are even more important. The decision makers put their reputation on the line when they buy from you. Their trust is critical.
Understand what motivated these customers to purchase in the first place, then assess how they got to the substantial amount they are currently paying. Be sure to continue to educate these customers around your product so they don’t lose sight of the value.
Get to it
There are many ways to shift focus to current customers. Start by identifying these types of people or companies. With so many parts of the business regularly communicating with customers, employ a strategy that the entire organization can follow so that current customers understand your product, receive accurate and helpful marketing communication and, most important, feel valued.
Sarah Nagel is a community outreach manager at social media management platform Sprout Social.
Image courtesy of Shutterstock.